AUD/USD clings to strong gains near 2-week tops, around mid-0.7100s

   •  Surging oil prices/US-China trade optimism continues to underpin Aussie.
   •  The USD bulls fail to capitalize on the latest upsurge in the US bond yields.
   •  The prevalent risk-off mood now seemed to keep a lid on any runaway rally.

The AUD/USD pair continued gaining positive traction for the second consecutive session on Tuesday and climbed to two-week tops, around mid-0.7100s in the last hour.

A combination of supporting factors helped the pair to build on the overnight goodish bounce from sub-0.7100 level and finally break through the 0.7130 supply zone. The ongoing upsurge in crude oil prices, supported by Libyan geopolitical tensions underpinned demand for commodity-linked currencies - including the Aussie.

This coupled with the prevalent US Dollar selling bias, despite the latest leg of an uptick in the US Treasury bond yields, and the latest optimism over US-China trade talks provided an additional boost/remained supportive of the strong bid tone surrounding the China-proxy Australian Dollar.

The positive move was further supported by today's better than expected Aussie home loans data, though a slight deterioration in investors' appetite for riskier assets, as depicted by a weaker tone around equity markets, kept a lid on any runaway rally, at least for the time being.

It would now be interesting to see if the pair is able to capitalize on the positive momentum or bulls opt to lighten their positions amid absent relevant market moving economic data on Tuesday and ahead of Wednesday's important releases of the FOMC meeting minutes and the latest US consumer inflation figures.

In the meantime, scheduled speeches by influential Fed officials and RBA Assistant Governor Guy Debelle might produce some short-term trading opportunities during the late US trading session on Tuesday/early Asian session on Wednesday.

Technical levels to watch

A follow-through buying has the potential to lift the pair beyond the 0.7175-80 intermediate resistance en-route the very important 200-day SMA near the 0.7200 round figure mark. On the flip side, any meaningful retracement back below the 0.7130 region now seems to find decent support near the 0.7100 handle, below which the pair is likely to accelerate the slide back towards testing the 0.7075-70 support area.

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